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Budget deal imminent?

On June 10, 2011, in State budget, by Scott

I’ve started writing updates several times this week, and then held off thinking more information would be available a few hours after sending. Since that strategy didn’t work, I’m writing in the hopes that we’ll have new news in a few hours.

Throughout the week, I have gotten lots of private messages asking for my private assessment of whether or not a budget deal is imminent. As you know, I’m not a rainbows and unicorns guy, and was pessimistic about the likelihood of a deal back in March.

That said, I’m pretty confident we’ll see a deal in the next ten days. And, from everything I can see, community colleges will still land between Scenario A and Scenario B, with the fate of the tax package determining where we fall.

Enough Republicans now appear willing to support a tax extension approved by the voters. The big question is whether or not taxes are extended pending an election. There are four camps–Democrats who don’t want an election at all, the Governor and some Democrats that want extensions pending a vote of the people (a "bridge"), Republicans who are willing to support an election but no "bridge," and Republicans that don’t support taxes, with or without a vote of the people.

In the end, Democrats will support an election if that’s what it takes. SEIU is lobbying heavily against an election, because the state’s largest union believes passage is futile and will simply waste campaign funds earmarked for legislative races next year. But, Democrats aren’t going to be willing to throw $5-9 billion away over this issue, and, in the end, SEIU probably won’t either.

The Senate convenes at 10 a.m. today to debate the budget and has similarly scheduled weekend sessions, but few people we talk to believe that the votes will come together until either the June 15 deadline or even a few days after. Remember, for each day after June 16, the average Assemblymember is forfeiting $400 cash. That’s a pretty strong pinch, although one could argue it hits less financially sound Democrats more than Republicans. The big question is who will cave first in a game of paycheck chicken.

Today is also the day that the new "first draft" district lines will be released by the Citizens Redistricting Commission. This could help or hinder a budget agreement, and nobody knows how it all will play out.

Finally, we’ve had some questions on why "Scenario A" yields deeper cuts for most districts now than in January. For most districts, 2/3 of the impact is from the now-projected $25 million student fee revenue shortfall. The remainder is the effect of moving from a simple cut projection (translated into FTES) to a workload reduction simulation. Like enrollment growth, workload reduction happens only on the marginal funding per student–not on base allocations ("foundation grants"). Also, based on district scale factors, this will vary per district, in the same way the impact of enrollment growth on a district’s total apportionment budget varies based on district size and composition.

Anyway, stay tuned to our Twitter feed for the latest.


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